Human Capital Essay

1652 words - 7 pages


An organization, in private or public sector, should have competitive advantages to win the competition. Competitive advantages can be gained by making a unique design of product or service, using a modern technology, implementing an effective organization design, and the most important is having an effective human resource management.

An organization should optimize every employee’s potential to get great work performances, and then can make the organization stand on better position than other organizations. One type of investment in an organization is human development. This kind of investment has a purpose to improve productivity by doing some improvements in health, ...view middle of the document...

Davenport (1998) says that people possess innate abilities, behaviors and personal energy and these elements make up the human capital they bring to their work.

N. Bontis, N. C. Dragonetti, K. Jacobsen a G. Roos (1999) define the human capital as the human factor in an organization; the combination between intelligence, skills and expertise that gives a distinctive character in the organization. The human elements of the organization are those that are learning, changing, innovating and providing the creative thrust capability which if motivated in the right way can ensure the long existence of the organization.

M. Armstrong (2006) defines the human capital as knowledge and skills which created, maintained, and used by individuals.
Human capital is an important part in organization. Human with all capabilities and abilities will produce a great work performance. There are six elements of human capital; intellectual, emotional, social, adversity, moral, and health. These elements cause an optimal work performance if supported by leadership and organizational structure which can provide a positive working environment.

Intellectual Capital

Intellectual capital is needed to find out opportunity and manage threat in life. Experts pointed out that intellectual plays a big role in adding values in every activity. Ross et al. (1997) in “Intellectual Capital: Navigating the New Business Landscape” state that a good organization is the one that continuously develop its human resource. Human has proactive and innovative characteristics to manage changes. Those who could not adapt with it will suffer.

Don Tapscott in his book entitled “Digital Economy: Promise and Peril in the Age of Network Intelligence” suggests 12 new economic themes which caused by the internet. One of those themes is knowledge-based economy. Only employees with broaden and updated knowledge will survive.

In early 1920, psychologists talked about Intellegence Quotient concept as the only one intelligence indicator, with assumption that human with high Intellegence Quotient would be able to solved life problems. Human with high Intellegence Quotient will learn quickly because he possesses fast contemplative faculties. Having a high Intellegence Quotient is not sufficient because human will mentally agile if he always updated his knowledge and learned from every phenomena in life. Intellectual not only coming from high formal education, but occurs when human has a will and an ability to think about something new.

Emotional Capital

Goleman (1997) uses emotional intelligence terminology to explain human ability to recognize and manage their own emotion, and understand other human emotion so he can act rightly when interacts with others. According to Bradberry & Greaves (2005), there are four dimensions of emotional intelligence; self awareness, self management, social awareness, relationship management.

 Self awareness is an ability to comprehend self emotion precisely and...

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